Federal Court Rules All Debt-Collection Calls Exempt from TCPA

A federal judge in Pennsylvania has ruled that the Telephone Consumer Protection Act does not apply to debt-collection calls, even calls made to cellular telephones. A copy of the decision is available here.

Noting that Congress enacted the TCPA to address telemarketing, the decision relied upon a portion of the Eleventh Circuit Court of Appeals’ decision in Meadows v. Franklin 1 which stated, “the [Federal Communications Commission] has determined that all debt-collection circumstances Robotare excluded from the TCPA’s coverage.”

The decision is certainly in the minority as nearly all courts examining the issue have determined that debt-collection calls made to cellular telephones using an automatic telephone dialing system or a prerecoreded voice violate the TCPA if the called party has not provided their “prior express consent” to receiving such calls. The Federal Communications Commission, which issues TCPA rules, has also considered debt collection calls within the scope of the TCPA. 2

The decision in Roy v. Dell Financial Services is on appeal to the Third Circuit Court of Appeals and we expect a decision within the year.

Roy adds to a Growing List of Confusing TCPA Decisions

Roy joins several decisions over the past six months that have reached extraordinary conclusions, confusing interpretations of the TCPA. In May, a federal judge in the Southern District of Florida ruled that a consumer providing a cell phone number to a creditor is insufficient to establish the TCPA’s prior express consent. 3 Mais rejected the argument it was bound by an FCC ruling, which found that “the provision of a cell phone number to a creditor, e.g., as part of a credit application, reasonably evidences prior express consent by the cell phone subscriber to be contacted at that number regarding the debt.” 4. The Mais decision is on appeal to the Eleventh Circuit Court of Appeals.

A federal court in Wisconsin ruled in March that “preview dialing,” a form of automated dialing that requires human intervention to initiate the call, fell within the TCPA’s coverage. 5  Relying on a 2003 FCC ruling that predictive dialers constitute an automatic telephone dialing system, the court found that the telephony system here, although it did not use the predicative dialer, still had the capacity to perform “predictive dialing.” 6 The decision was later vacated by the court and the case dismissed.

For assistance concerning TCPA issues, contact the attorneys at Maurice & Needleman who regularly defend and provide counsel on TCPA matters. The Consumer Financial Services Blog also provides a re-broadcast of its June 2013 webinar Hot Topics in TCPA Litigation, available here.

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Notes:

  1. 414 F. App’x 230, 235 (11th Cir. 2011)
  2. See, FCC Declaratory Ruling, FCC 07-232, para. 11 (January 4, 2008) (“We also reiterate that the plain language of section 227(b)(1)(A)(iii) prohibits the use of autodialers to make any call to a wireless number in the absence of an emergency or the prior express consent of the called party. We note that this prohibition applies regardless of the content of the call, and is not limited only to calls that constitute ‘telephone solicitations.’ However, we agree . . . that calls solely for the purpose of debt collection are not telephone solicitations and do not constitute telemarketing. Therefore, calls regarding debt collection or to recover payments are not subject to the TCPA’s separate restrictions on ‘telephone solicitations.'”)
  3. Mais v. Gulf Coast Collection Bureau, Inc., 2013 U.S. Dist. LEXIS 65603, 14-15 (S.D. Fla. May 8, 2013)
  4. In re Rules Implementing the Tel. Consumer Prot. Act of 1991, 23 FCC Rcd 559, 564 (F.C.C. 2007)
  5. Nelson v. Santander Consumer USA, Inc., 2013 U.S. Dist. LEXIS 40799 (W.D. Wis. Mar. 8, 2013)
  6. Id, citing  In re Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, 18 F.C.C.R. 14014, 14091-93 (July 3, 2003)

Donald Maurice provides counsel to the financial services industry, successfully litigating matters in the state and federal courts in individual and class actions. He has successfully argued before the Third, Fourth and Eighth Circuit U.S. Courts of Appeals, and has represented the financial services industry before several courts including as counsel for amicus curiae before the United States Supreme Court. He counsels clients in regulatory actions before the CFPB, and other federal and state regulators and in the development and testing of debt collection compliance systems. Don is peer-rated AV by Martindale-Hubbell, the worldwide guide to lawyers. In addition to being a frequent speaker and author on consumer financial services law, he serves as outside counsel to RMA International, on the governing Board of Regents of the American College of Consumer Financial Services Lawyers and on the Governing Committee of the Conference on Consumer Finance Law. From 2014 to 2017, he chaired the ABA's Bankruptcy and Debt Collection Subcommittee.